I apologise and the answer is probably very straight forward but can you use both Parallels and Bootcamp interchangably? or can you only use one
Yes, you should be able to do that. Install Windows using BootCamp, then install Parallels and tell it to use your BootCamp partition.
You must have either the Business or Ultimate versions of Vista if you plan to run in a VM. It is likely that you will have to separately reauthorize when running in the VM, which you should be able to handle via a phone call.
Let me know if I got anything wrong.